Regulatory complexity is holding back blockchain deployment, according to an EY poll of senior professionals who attended the EY Global Blockchain Summit in New York. Six out of ten attendees cite regulatory complexity as the biggest barrier to widespread adoption, followed by issues around integration with legacy technology (51%), and lack of general understanding of blockchain’s capabilities (49%).
Asked why organizations should be looking at blockchain, 28% of respondents point to increased operational efficiencies as the main advantage, followed by a high level of transparency (18%), and trust in data integrity (16%).
Some 60% believe the financial/professional services industry will adopt blockchain technology with the next year, but in a gradual way. Others (17%) anticipate more rapid adoption.
The participants expect to see the US to lead in blockchain adoption in the next two years (28%), followed by China (18%), Japan (13%) and the UK (12%).
EY expects blockchain to become a standard enterprise tool, but it flags four “upcoming transitions” that it believes will drive the technology’s maturity. “With these developments, blockchain could become fully operationalized into enterprises, leading to a surge in applications across industries,” says Paul Brody, EY Global Innovation Leader, Blockchain Technology.
The blockchain transitions to watch are:
- Shift from private networks currently to public networks to create an open system for all users
- Transition from synchronization to tokenization to improve accuracy and reduce risk
- Moving from cryptocurrency to tokenized fiat currency to transfer value on public networks
- Shift from parallel separate systems to integration with laws and regulation from central banks and governments
“As blockchain platforms become more mainstream, putting a robust governance model in place will be key,” adds Brody. “Coupled with establishing best practices for reviewing the integrity of cryptocurrencies and their applications, this can help build trust in the company’s underlying assets, ensuring stakeholder voices are heard and ultimately instilling greater investor confidence.”